Preservation, Business leaders call for changes to Historic Tax Credits

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The former Sibley's Department Store in Rochester was converted to apartments with the help of Historic Tax Credits.

ALBANY, NY (02/26/2018) (readMedia)-- The Preservation League of New York State is bringing preservation and business leaders from across New York State to the Capitol on Tuesday to ask legislators to support key changes to New York's Historic Tax Credits, including:

  • Decoupling the NYS Historic Tax Credit from the Federal Historic Tax Credit to ensure that the NYS credits may be taken all at once rather than over 5 years; and
  • Extension - through December 31, 2024 - of the NYS Historic Commercial Properties Tax Credit and NYS Historic Homeownership Rehabilitation Tax Credit.

Assemblymember Carrie Woerner (D-Round Lake) and Senator David J. Valesky (D-Oneida) have introduced legislation to accomplish these goals (A.9882 / S.7648). The League is urging the Assembly and Senate to include the language from these measures in Joint Legislative Budget Bills which will be drafted in March.

"New York leads the country in Historic Tax Credit-related investment," said Jay DiLorenzo, president of the Preservation League of New York State. "Since they were established in 2007, the New York State Historic Tax Credits have proven to be a cost-effective economic development and historic preservation incentive, and have served as a national model for state historic tax credits. Unfortunately, changes to the Federal Historic Tax Credit and the anticipated sunset of this program in 2019 have created uncertainty that threatens projects already in the pipeline. We're asking for changes that will restore confidence in the program and foster continued reinvestment in every corner of New York State."

The Federal Tax Cuts and Jobs Act of 2017 requires that the Federal Historic Tax Credit be taken over five years. Current estimates place the impact of this change at a 15% credit value reduction. Separating the state credit from the federal credit will ensure that the credit retains its full value in New York State.

The New York State Historic Tax Credits are slated to expire at the end of 2019. Extension in the 2018 budget will ensure that projects currently under consideration for investment and rehabilitation continue to move forward with investor and developer confidence that the program will remain in place.

"The New York State Historic Tax Credit and the Historic Homeownership Rehabilitation Tax Credit have been key tools in driving job growth and economic development in Upstate while preserving architecture unique to each community. Extension of these tax credits and decoupling them from federal law are essential to ensuring that these projects continue uninterrupted across the state," Senator David J. Valesky said.

"As the Assembly representative for much of Saratoga and Washington counties, whose communities are steeped in American history and feature many historical buildings, I am proud to be an advocate for the practice of historic preservation," said Assemblywoman Carrie Woerner. "My new bill, A.9842, would encourage more organizations to choose historic preservation by increasing the maximum award amount for the New York State Historic Rehabilitation Tax Credit and protecting the tax credit from any tax changes at the federal level. I am grateful to the Preservation League of New York State for their leadership around issues of historic preservation and for their partnership in drafting this new legislation."

"Our aging cities, such as Syracuse, require restoration and rehabilitation," said Assemblyman William B. Magnarelli, D-Syracuse. "The New York Historic Tax Credits have allowed developers to aid our cities in that regard. It is imperative that these credits continue so that developers have confidence in this program into the future."

"I have seen first-hand the impacts of the Historic Tax Credit legislation not only in my hometown but throughout the 108th Assembly District.," said Assemblymember John T. McDonald III. "New life has brought about artful and thoughtful restoration to properties thought to be destined for demolition. Additionally, we have seen growth in the tax base of our urban areas and a new focus on supporting the skilled workforce behind the masterful renovations. I am fully supportive of the proposed changes to the HTC. It is a key economic and community development tool not only here in the Capital Region but throughout the state of New York."

"The NYS Historic Preservation Tax Credits have been vital to the revitalization of our cities and main streets throughout Upstate New York," said Assemblymember Pat Fahy, D-Albany. "To build on this success, we must ensure that the state program continues and unlink it from the federal tax credit to ensure our rich history has a future."

"The Historic Preservation Tax Credit represents one of the most effective preservation incentive available to developers, driving private reinvestment for the redevelopment of historic buildings and communities," said Robert Simpson, president of CenterState CEO. "Without this program, local projects such as the transformation of the Pike Block and the restoration of the Hotel Syracuse might not have been possible. Its long-term viability is critical to revitalizing the historic cores of cities and towns across the state."

"The NYS Historic Tax Credit has provided significant funding to projects throughout the Hudson River Valley that have resulted in community revitalization, job creation, affordable housing and the preservation of our rich heritage," said Kevin O'Connor, Chief Executive Officer, RUPCO, Inc. "We urge the NYS legislature to adopt these two changes that will extend this invaluable tool and leverage additional private capital for this important work."

"The effective use of the Historic Tax Credit at the state and federal level has propelled significant public-private investment in New York State's main streets and aging building stock, while creating good-paying jobs for the design and construction industry. In order maintain our leadership position, we must come together to support the continuation of the State credit as it currently stands and extend the program to provide certainty and reassurance to investors in these properties," stated Kirk Narburgh, AIA, President of the American Institute of Architects New York State.

"The State Preservation Tax Credits were instrumental in restoring Macy's and the spectacular Kings Theater in Brooklyn, an economic engine for its area," said Peg Breen, president of The New York Landmarks Conservancy. "The credits also helped restore 22 buildings at the Randolph Houses in Harlem into 167 new and affordable units," she added. "There's no doubt New York City has benefitted."

"New York's Rehabilitation Tax Credits are among the most common-sense development programs in our state," said Elizabeth Goldstein, President, The Municipal Art Society of New York. "By encouraging private investment in historic properties, these programs create jobs, improve neighborhoods, and restore treasured buildings that are emblematic of New York's past and vital to its future. It is imperative that the State legislature extend these benefits without delay."

"Historic Tax Credits are potent financial incentives for historic preservation on Long Island, especially for buildings in and around historical Main Streets or commercial centers, where many old structures are at risk of demolition," said Sarah Kautz, preservation director of Preservation Long Island. "Recent projects at the Second Street Firehouse in Riverhead and the Bates House in Greenport provide excellent examples of how Historic Tax Credits attract interest and investment in the rehabilitation of historic buildings in downtowns across Long Island."

"The commercial tax credit was a key incentive for the multimillion dollar Hotel Saranac project," said Amy Catania, executive director of Historic Saranac Lake. "The reopening of the large 1920s hotel last month marks a major step forward for the revitalization of historic downtown. The residential tax credit has spurred the restoration of several residential properties. Last year, my family purchased and restored a National Register 'zombie property.' We would not have been able to afford to rescue our 'new' home without the tax credit."

"The NYS Historic Tax Credit program is an extremely important incentive for the revitalization of New York's communities, large and small," said Steven Engelhart, Executive Director, Adirondack Architectural Heritage. "Among the most important and visible of these projects in the Adirondack region is the restoration and revitalization of the Hotel Saranac, which just reopened in January, and which would not have been possible without these incentives. Other projects using these programs include the Lee House in Port Henry, the Old Brewery in Keeseville, the D&H Railroad Station in Plattsburgh, and a number of downtown projects in Watertown. Our own project, to restore and rehabilitate the Stone Mill in Keeseville, also uses this programs for its funding. All of these projects would not have been possible without this incentive and, without these projects, these communities would all be less lively and prosperous."

"Tax credits have been a key component in the ongoing revitalization of Rochester's downtown core," said Wayne Goodman, Executive Director, Landmark Society of Western New York. "Without them, the $200 million rehabilitation of the former Sibley's Department Store would not have been possible and one of downtown's largest buildings, located in the heart of our Main St. commercial core, would likely be sitting vacant. The credits have also been instrumental in stabilizing and preserving Rochester's neighborhoods and impressive historic housing stock."

"Without tax credits, the City of Albany in particular, and the Capital District in general, would be hard pressed to mount any type of comprehensive community revitalization program," said Dick Lundgren, Executive Director, Historic Albany Foundation. "The facts are that building rehabilitation projects are generally financially infeasible without the economic boost that is provided by tax credits. It is imperative that the tax credit program be continued if we want to see any meaningful revitalization of vacant and underutilized buildings in the Capital District."

"Outside of the Governor's Buffalo Billion, no program has had more economic impact on Buffalo and Western New York than the Historic Tax Credit, which has led to more than $500 million in investment in our local communities," said Jessie Fisher, Executive Director, Preservation Buffalo Niagara.

According to Erin Tobin, the League's vice president for policy and preservation, "In 2016, Historic Tax Credit projects – both Federal and State – generated $45.6 million in New York State taxes, along with $53.9 million in local taxes and $142.9 million in federal taxes, more than any other state in the country. Additionally, these projects created nearly 14,000 jobs in fiscal year 2016 alone. We're grateful that our colleagues from around the state are joining us in Albany to secure support for this program and its impressive record of success."

For more information on the Preservation League of New York State, please call 518-462-5658 or visit the League's website at www.preservenys.org.